the only real restriction you have while developing for iphone is the sdk apple released for iphone. other than that you will mainly use OpenGL and OpenAL which are both pure C code. in some cases you might want to use some c++ libraries (like box2d) but there are equivalents both in C and Obj-C.
so every game you release for iphone should at least have some obj-c codes to load your application and to do some basic file read/write things, other than that you are free to use pure C, Obj-C or C++ or even a combination of those languages.
also as jasconius said there are many games written and published using only Obj-C. there is even a opensource gameengine named cocos2d-iphone out there that powered many iOS games so far.